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tv   First Business  KICU  March 11, 2014 4:00am-4:31am PDT

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dividend dazzle.. how buying stocks that share the wealth is paying off... in today's cover "unprecetented mystery". questions pile up as boeing launches an investigation into a missing flight to squeeze the most out of your tax refund this year. and... the ugly problem in the housing recovery that's starting to worry economists.... first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning! it's tuesday, march 11th. i'm angela miles. in today's first look: trouble in china. new economic dats shows chinese exports fell a dramatic 18% last caused the market to tumble as traders become concerned about consumer sales in the u.s.-- its biggest
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trading was one of the rare gainers on the day up $2 whild oil pushed back $1.50.urban outfitters tops estimates. the retailer reported earnings after the close. sales were strongest at urban's free people and anthropology chains.1,500 garment factories in bangladesh will be inspected by august under a pact signed by 150 clothing brands. it follows a number of tragic accidents.updates on the first 30 are available today. let's get the trading day rolling with trader lincoln ellis of green square capital. good morning to you lincoln. >>good morning to you. >>we seem to have a bout of china syndrome. >>a little bit of interest in china. export data missing by some 18% over the weekend. really clouding whether or not the real demand from the developed economy is there and whether the engine that drives
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the export driven economy that is china is perhaps broken. >>back in the u.s.better weather. so what does that mean for nat gas prices? >>a little bit lower. there's still some interesting dynamics between both coasts but a lower price as we move into springtime. hitting 50 degrees yesterday in chicago but some colder weather through the middle of the weekit'll be a bumpy ride here for energy investors the next couple of weeks. >>before you take off some investment ideas would be great. >>i think peripheral europe a bit of a neighborhood that has been cast aside but is actually coming back and coming back in a pretty significant way. spain, portugal, italy, and even irelandthe first country to come out of that european union bailout program all putting up some very significant numbers and looking promising as we head through 2014. >>thank you lincoln. have a good trading day. >>you too.
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americans are feeling pain at the gas pump. prices surged 20 cents in the past month. analysts says its impossible to tell when prices will peak. especially if tensions escalate between russia and the ukraine. crude oil prices continue to hover above $100 per barrel. gasoline futures are up 5% in the past two weeks. the latest data shows that supplies of gasoline have tumbled to the lowest level in weeks as refiners close for seasonal maintenence. the average price for a gallon of unleaded gasoline is $3.48 we turn to chuck coppola now for a look at how boeing is handling fallout from a missing malaysia airlines flight. in our cover story investigators are still trying to sort out what happened aboard that malaysian airlines 777 flight that lost contact with air traffic controllers. probes are "also back" into boeing's dreamliners.some analysts say all this public scrutiny is having an effect on boeing stock. as many as 40-ships and dozens
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of aircraft from ten countries are involved in a massive sea and air search to solve the disappearance of malaysian airlines flight 370 enroute from kuala lumper to beijing, early saturday, local time. 239 passengers were on board. "there were // three us citizens. // philip wood, nicole meng and leo meng were on board." the u-s sent f-b-i investigators after interpol confirmed that two passengers were aboard the plane with stolen passports. that, despite that an international alert of the specific names on those passports released last year and the year before. "you find that there's a passport stolen two years ago and someone can use it isn't a crack, it's a gaping hole." the airliner was at 35-thousand feet in good weather when contact broke off. malaysia airlines chief executive says radar data indicates "a distinct possibility the airplane did a turn-back." "if it's below the surface of
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the water, we will not be able to detect it." the malaysian airliner was a boeing triple-7, regarded as one of the safest airliners ever developed. but boeing is dealing with hairline cracks found in 40---787 dreamliners still in production...and low oil pressure in the right engine of a japan airlines 787 forced to make an emergency landing in hawaii over the weekend. the convergence of these contributed to a drop in boeing stock. "i think everyone is watching the dreamliner like a hawk and anything that happens becomes a story. but these wing cracks make us nervous." the source of the wing cracks is mitsubishi heavy industries, which attributes the problem to a change in its manufacturing process that it says has since been corrected. meanwhile, there are indications in the
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options trading market, boeing stock could rebound in the spring. there's plenty more to report from the airline industry...two airlines are ending a frequent-flier partnership. starting april 1st, american and jet blue will no longer accept miles or points for eligible flights by the other's airline. american recently merged with us airways and now overlaps on some jetblue routes the carry-on crackdown by united airlines. came from customer complaints. united says its "not" about collecting more fees on checked bags. but instead, was hit by a barrage of objections to passengers with over-stuffed bags on board.. united recently ranked 8th out of the top ten carriers in a major customer satisfaction survey. united cancelled 25,000 flights last month due to winter storms. the number of people taking public transporation is at the highest level in decades. americans made 10 billion trips last year on buses, trains and subways. the american public transportation association
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suggests the trend will continue. people are shifting to options other than driving cars. some cities are expanding train and bus lines. and in some cases service has been restored since the financial crisis of 2008. a former lehman brothers investigator has been hired by general motors. jenner & block chairman anton valukas is leading a team of lawyers in a probe of the gm recall of 1.6 million vehicles gm is accused of knowing about the recall for 10 years before taking action. a faulty ignition switch is being blamed for 13 deaths. c-e-o marry barra is overseeing the process. the sec reportedly is investigating possible market manipulation by currency traders. bloomberg news says regulators want to know if currency traders at the world's biggest banks distorted prices for options and exchange traded funds by rigging key foreign- exchange rates. the sec and cftc declined to comment. failed bitcoin exchange "mt gox" is filing for bankruptcy. the move will shield the
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exchange from class action lawsuits in the short term, and allow the operator to protect its remaining assets. in february, hackers stole nearly 400 million dollars of the virtual currency, and mt gox caused a panic for customers when the site unexpectedly went offline. it's currently facing at least two lawsuits. the sbarro pizza chain has filed for chapter 11 bankruptcy protection. this is the pizza- makers second filing since 20- 11 and comes after it closed 155 of its u-s outlets in february. there are still 800 sbarro restaurants in more than 40 countries. the chain is popular in food courts, and was hit hard as mall shopping numbers declined during the ression. the golden arches continue to lose a little luster. global sales for mcdonald's suffered a larger than expected drop in february. stung by a very tough winter in the u.s.that further slowed business. sales at the world's biggest restaurant chain fell three tenths of a percent analysts had predicted a tenth
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of a percent drop. mcdonald's has been struggling for two years now due to the sluggish economy and high beef prices. chiquita is on the way to becoming the world's top banana. i'm a chiquita banana and i'm here to say, bananas have to ripen in a certian way.. chiquita is based in charlotte, north carolina. and is merging with dublin based fyffes to improve its global presence. -- the companies create a global banana brand with an estimated $4.6 billion in annual revenues.the new company will be called: chiquita-fyffes. the website known for selling cars is selling itself. cars dot com is on the block for $3 billion according to the wall street journal. the car shopping and research site is a part of classified ventures l-l- c and owned by five different media companies. the website would occasionally partner with the media outlets on evaluations. as the old saying goes past performance is no guarantee of future returns. however, a new study by bankrate is giving fairly indictions investing in dividend stocks has been very beneficial. greg mcbride of joins us by skype this morning. good morning greg. how did you
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do the study? >>we looked at 3 different portfolios of $1 million over a 20 year period in retirement pulling out money each year adjusted for inflation. what we found is that hands down dividend paying stocks and in particular companies that had increased their dividends for at least 25 consecutive years not only produced that growing stream of income that's needed to live off of but also minimize your odds of running out of money during that period of time. >>is it still worth it to go into dividend yielding stocks? >>dividend paying stocks are an important component of a normal overall portfolio. statistics have shown that dividends alone account for about 40% of long term returns. so you can't ignore them even if they tend to be those slower growing stodgier companies. >>the conservative route always is the best route. thank you greg. >>thank you angie. at & t is stepping up its game against t-mobile. in a battle over lower prices.... both cell phone carriers are cutting costs. at at&t , it's dropping its 2 gigabyte data plan by 15
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bucks a month, to 65 dollars. t mobile will offer 1 gigabyte for 50. the two companies have been locked in an ongoing pricing war for months, trying to sway customers. a new speed reading app promises that you can get through a novel in 90 minutes. its made by spritz. and, places words directly in front of a users eye so a reader doesn't waste time scanning a page. the company claims you can read up to a thousand words per minute. the new app is set to debut in april on samsung's galaxy s-5 phone and gear 2 smartwatch. psychologists who work in this field point out however that the technology is nothing new, and that at such speeds no matter how the words are delivered -- comprehension goes way down. still to come: why retail earnings matter more than ever this week. plus..why a perk of the housing recovery could turn into a problem in the long run?
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and, tax temptation. how to avoid splurging with your refund this year. that's just around the corner!
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americans on average are receiving checks for around $3,000 from uncle sam. tony zimmer from associated tax advisory groups is here with tips on how to get the most out of your tax refund money. great to have you on the show. welcome. >>thank you for having me. >>the number one on your list is to pay down your debt. that's a terrific idea. >>yes. that's a cornerstone of every financial plan. >>it's not so much the debt that you have it's the amount of dollars needed to service that debt. if you have a large amount of credit card balance and you're paying 24% interest out of every week you work for
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40 hours you may be spending or taking 5 to 10 to 12 hours of your work effort just to pay back that. so number one you have to get rid of that. >>you also say to finance your future. what do you mean by that? >>we know that 50% of all americans are living from paycheck to paycheck. that's a very common thing. that means there are no emergency funds, no savings accounts. there's no money there for any opportunities. last year as you mentioned, $3000 was the average refund and there's no better place to put that money except to fund future possible emergencies and opportunities that come along. >>then you say to start a gift fund >>absolutely. there's basically 2 shopping seasons throughout the year. one of course is christmas. we're all aware of that at the end of the year. if you don't put money aside to pay that and you put it all on
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that credit card chances are by the time june and july comes you're still paying interest on the pair of socks you bought uncle charlie. >>i love that idea. >>just put some dollars away every time that you can starting right after summer if possible. >>and prepare for repairswhat does that mean? >>we're all going to have repairs whether it's on the house or the car. something's always going to go wrong. you gotta prepare for the unexpected. if you have money set aside for that you don't have to worry about loading up the credit card or where's the money going to come from. you can look at it from a different viewpoint tooyou can also use it for a more fun project. if you start putting money aside ahead of time you can maybe remodel kitchens, you can maybe pay a larger down payment on an automobile. but the more cash you have up front to reduce that expense in the future is going to be key. >>and finallyhelp your kids. >>especially now. they may be helping them financially but it also refers to putting money away for their college education. when i was growing up my dad started me on savings accounts. well, at .005% interest they don't see much of a return. there's not a whole lot of incentive. so you can be the banker if you choose. for every $10 they put into a savings account put some money away and match it with a dollar
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or two or three so they can see that account grow. so they key is to make absolutely sure that they start getting mind conscious of saving money. >>thank you for coming on our show. we appreciate you. >>i appreciate it. thank you. still to come... retail names that are giving traders a buying and selling opportunities... also-- why people who took advantage of re-fi-s during the financial crisis are in for a rude awakening. that's up next, with bill moller! ♪ ♪ ♪ ♪
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america's housing sector is in recovery mode. that's good and important. but... turns out there's a big but. turns out that the millions of homeowners who refinanced at super low interest rates in recent years - that actually threatens the recovery. this is the conclusion from a research brief from the institute for housing studies at depaul university. jim shilling is an author of the report. how is that possiblethat people with low interest rates are going to possibly hurt the recovery in housing? >>since 2011 interest rates have steadily fallen. people who are now thinking about
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refinancing are now going to have second questions about selling their house simply because they're sitting on low interest rate mortgages. they've got to ask themselves is it worthwhile giving up that low interest rate mortgage. >>so they are sort of trapped. and these could go on for 15-30 years. >>they are trapped. they are locked in to their existing house. >>how important is this then to the recovery? why does that effect the recovery? >>it effects the recovery because we need a healthy housing market to have a robust economy. with households not turning we don't have a healthy housing market. >>so you need people selling homes and you need people buying homes but all of these peoplemillions of them are going to be locked in their homes. >>they're going to be locked into their house. >>the irony is as your report indicates is that the healthiest and most robust recovery markets for housingthat's where the hurt's going to really be. >>yes because in softer markets they benefitted from price increases. those price increases have unlocked a lot of households that have
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negative equity so we're starting to see transactions in those markets. so the hardest hit markets are going to be those markets. they're the strongest markets that people have been financing and as a result have this very attractive interest rate on their mortgage that they're unlikely to give up. >>this is going to start happening when interest rates really start to rise. what is the policy point here? what should regulators do about this? >>the policy implications are several and they all involve the fed. the most important is that the fed really needs to be cognizant of their quantitative easing and the impact that's going to have on the housing market. >>and you're making the fed known through your results here. >>that's right. >>jim shillingthanks so much. >>thanks bill. thanks for the warning bill-- coming up --- as weak economic news comes out of china.. ...find out why traders still see an opporunity to profit on chinese real estate.. that's next in chart talk! i'm going to pass chemistry, and i'll take it from there.
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i'm going to do what makes me happy. i'm going to work hard. be independent. live large. make the most of every opportunity. i knew i wanted to go to college. but figuring out how to pay for it? i didn't have a clue. the u.s. department of education has over $100 billion. and that's a lot of money. to help students pay for college. and the free application? you mean the fafsa. i did it online. it was easy. i'm never giving up on my goals. i will make a difference. i'm going to find out how to pay for college. i'm going to
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james ramelli of keene on the market dot com joins us now for chart talk. good morning james. >>good morning. >>you similar to so many traders are watching data coming from out of china this week. why is that? >>it's a very thin week economic data wise here in the u.s. we really don't have too much going on until thursday when we get jobless claims and some retail numbers. so eyes are going to be on china. specifically i'm looking at one stock that's reporting earnings tomorrow morning. ej is the ticker. they're a chinese real estate services company. thisk stock is a relatively mixed performer on earnings. it's rallied 5 out of the past 8 quarters. something that we've been seeing that's been relatively interesting in ej going into this announcement is
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a lot of activity in the march 16 call line. a huge open interest in that line. a lot of call buyers. when i see institutional money getting long a stock ahead of earnings i want to get long that stock with them. >>shouldn't we be concerned if china is experiencing a slowdown? >>of course that is the main concern. that doesn't mean that this stock can't pop on earnings. keep in mind that stocks move on earnings based on expectations not on whether or not they were profitable. so if they come out with better than expected earnings here just like i see the institutional trader betting they will then this stock is going to go higher here and this trade should be profitable for me. >>as you mentioned retail numbers will be very critical to the week. you're also watching a couple of retail stocks such as dick's. what do you see there? >>dks has another relatively mixed historical performance on earnings. it's rallied 5 out of the past 8 quarters. it's sitting at a key resistance level on the chart. the stock's
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trading right around $54 with an upside target for earnings of around $57 half. now that level is the big time resistance level on the chart. if dks does report a good number and the stock does move higher it will be interesting to see whether or not sellers come back in at that level. that's my upside target. i still think that dks is going to head higher on earnings. i'm going to be playing it to the long side with a target of 57 half. >>what do you think about the fundamentals of that company? how's business going? >>we look at the fundamentals here. as an options trader that's not as important to me as the order flow and the chart is.retail has been very tricky this year. we've seen some retail plays that have worked out very well and we've seen some that haven't. i think the consumer has been fickle over the past year. we've seen a lot of interesting retail stories here but looking at the chart and looking at the order flow ther's not too much open to interpretation there and i think the stock's going to head higher. >>that's good to know. thank you james. >>thank you. it's time for us to wind it down for today.coming up tomorrow-- find out how to buy a car without letting the payments take too much of a chunck out of your paycheck. car shopping savvy is coming up in wednesday's show. from all of us for today.. thank you for watching and have a great tuesday.
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